Abstract
This research is employed to examine the environmental issues embedded in Belt & Road Initiative (BRI), to be more specific: testify which of these hypotheses: Pollution Havens Hypothesis, Pollution Halo Hypothesis, Environmental Kuznets Curve is in accordance with the current development condition of BRI counties; whether there exists a bidirectional relationship among Ecological Footprint, Gross Domestic Production, Foreign Direct Investment (FDI) in Belt & Road Initiative countries. In this paper, Panel Vector Autoregression is utilized to analyze a dataset of 44-member countries in this initiative, ranges from 1990 to 2016, to empirically testify the environmental evaluation of this project. Results are analyzed on both long-run and short-run cases through Orthogonalized Impulse-Response Functions (IRF). This research displays a great heterogeneity among different target variables, FDI as a main variable of interest does not expose a bidirectional relationship with Ecological Footprint, only Ecological Footprint demonstrates robust influence on FDI. In addition, Pollution Havens Hypothesis is certified to be true for FDI and GDP among Belt & Road Initiative member countries.
Highlights
In 2013, Chinese government declared ambitious Multi-Billion-Dollar regional integration initiatives, called the “Belt & Road Initiatives”
This paper provides an overview of Panel Vector Autoregression (PVAR) methodology suited for macroeconomic practices and environmental issues to clarify a variety of practical issues to sustainable development
Both Chinese and foreign scholars began to realize the environment issue embedded in Belt & Road Initiative after its release, opinions on BRI’s environmental influence varies largely among scholars, some of them being positive while others concern about its adverse effects
Summary
In 2013, Chinese government declared ambitious Multi-Billion-Dollar regional integration initiatives, called the “Belt & Road Initiatives” ( on BRI). This current study seeks to fill the gap between literatures and empirical theory in this regime, which elucidate the ambiguous causality correlation between Ecological Footprint and FDI among BRI member countries Based on this theoretical background, practical analysis on Belt & Road Initiative member countries will be implemented under the analysis framework of Panel Vector Autoregression models ( on PVAR). The main theoretical advances of this research relate to the fact that, analyzing the relationship between Ecological Footprint and GDP, FDI in BRI member countries is helpful for us to understand the importance of environmental development which is of great significance in terms of sustainable development in this specific region.
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